Win, Place, or Show? How Foreign Investment Strategies Contribute to the Technological Growth of the Multinational Corporation

This paper investigates the sources of technological growth of the multinational corporation. We conceptualize and shed empirical light on whether foreign investment strategies based on advanced greenfield subsidiaries, acquired subsidiaries, or a combination of both increase the likelihood of entry into technologies that represent new additions to the MNC's technology portfolio. Repeated events analyses of the complete U.S. patenting activity in 226 foreign locations of 21 Swedish multinationals reveal a substantially higher likelihood of entry into new technologies among investment strategies based on foreign acquisitions, as opposed to investment strategies based on greenfield establishments only. To the extent that MNC managers seek to enhance technological and strategic renewal through the expansion of foreign operations, the findings suggest that foreign investment strategies that involve the use of acquisitions are and should be the preferred alternative.